The Best Investment Apps for Small-Dollar Investing
- January 10, 2021
- 7 min read
- 18460 reads
Investment apps make the whole investment concept easy to understand and much more accessible to experienced and new investors alike. You can now sign up for an investment app and manage your portfolio from the comfort of your own home.
Investment apps generally offer low fees and easy service access. They use everyday language that enables more people to gain confidence in their financial literacy with personal finance.
Back in the day, those who delt in investments had to call a stockbroker and organize a trade. The whole way the stock market was run enabled huge commission charges. Stock investment apps are still run by investment brokerages. They have just made it much easier to conduct buying and trading for the average person.
Stock investment apps are committed to simplifying the process and making investing more accessible which is great news for us!
Best Investment Apps
At Finaner.com, we would recommend Acorn, Stash, and Sofi as the best investment apps for beginners. You can invest with almost unnoticeable amounts of cash. Both Acorn and Stash offer opt-in features that round up your purchases through your debit account to the nearest dollar. Below is a breakdown of what each app offers.
Stash Investment App
Fractional share offerings
$0 account minimum
Stash is a great investment app for beginners. Stash keeps your interest and makes things super simple with its categorical investing. It focuses mainly on EFTs and a smaller portfolio of stocks. For new investors, EFTs are the safest way to diversify your investment portfolio.
Instead of forcing you to choose a few individual stocks to invest in, Stash lets you choose from a range of portfolios.
How Stash works is you simply set up the app to take a regular withdrawal from your bank as little as $5 a month is acceptable. Still, of course, you are not going to see huge gains on such a small amount. But it is an excellent way to increase your financial literacy with a little chance of loss.
You can choose to have money withdrawn every week, every two weeks or every month. When it takes this cash, you can set it to automatically invest in select areas, or you can manually invest it.
From there, you just watch your account grow and collect the compound interest.
Acorns Investment App
Round up feature
Good for people who struggle to save
Acorns works because it monitors transactions on any connected bank account and rounds each transaction up to the next dollar. That rounded-up amount is then transferred to your Acorns account, and when it hits $5, it gets invested.
It is a great feature, but it can seem a little invasive at first. Think of it like the old Bank of America account that offered a similar roundup service. But instead of investing your funds, it would transfer them into a savings account.
- Find out how much you should be saving here.
Acorns isn’t always the best investment app for beginners new to the finance game because you cannot really choose your own investments. Instead, Acorns checks your goals and invests your money the best way they feel will help meet them.
While you’ll still see gains here, the fun is taken out of it by missing out on choosing what to invest in. It can be beneficial if you don’t want to decide where you’re money goes. Still, I would highly recommend Stash or Sofi for beginners who want to build their financial knowledge, which is key to good long-term investments.
The Acorns round up feature is like finding 10 bucks in your jacket pocket. You don’t really notice the extra round up money coming off your purchases. It can add up really quickly. If you’re just starting out with this whole investment thing, it is a great way to ensure you are getting interest on your newly discovered savings.
Acorns customer service is a plus with the app. They also have a prediction interface that shows you what small changes to your account will do to your retirement savings.
Acorns vs. Stash?
Well, that’s a hard one; if you want hands-off investments, then I would suggest considering Acorns however they do charge a small monthly fee. Sofi is a great alternative with no management fees.
Low-cost investment options
Free financial advice and education
Zero management fees
Fractional share options
If you are really fresh and want to learn as much as you can about personal investment, Sofi may be your best investment app. They offer investment education and personal financial planning.
You don’t have to have a lot of money to use this financial app as Sofi offers a $1 minimum deposit and no fees for online stocks or ETF trades. In our Sofi review opinion, we like that they provide an option to purchase fractional shares; this means you get more stock options with less money.
They offer a broad range of low-cost investments, and their management is free. They are great if you want to be a hands-off investor but know that your money is growing or if you are wanting to improve your financial knowledge.
Sofi clients have a choice of portfolios that are arranged by risk tolerance. They help you understand your investment objectives, such as if you want to risk high for short term gain or want a more guaranteed long-term investment growth.
Sofi also offers high interest savings accounts for those who want to put some money away for a rainy day or build an emergency fund.
Stash vs. Acorns vs. Sofi?
Try Sofi, they offer the best support for new investors as well as no management or subscription fees (at the time of writing this). They are great if you are wanting to build your knowledge as well as your portfolio. Sofi’s high-interest savings accounts and free financial training will boost your ability to make sound investment choices as you and your money grow.
Other Investment Apps
While Acorns, Stash, and Sofi are best for beginners, other great finance apps are on the market. Once you have some experience in building your portfolio, you may want to branch out and try other financial apps.
Shop around the market and find one that suits you. Make sure to look at the app charges and the trading fees for buying and selling stocks. Many will offer no fees or a 0.25% annual fee.
But as far as getting your feet wet, try any of these three great apps and begin the journey of building your wealth to gain financial freedom.